Doing Business with Romania - Über die Osec

� Inflation issues
o The National Bank of Romania (NBR – Romania’s Central Bank) shifted to direct inflation
targeting in August 2005. This monetary policy strategy was adopted after completing a
preparatory process, whose last stage consisted in setting up and testing of the economic
analysis and monetary policy decision framework specific to inflation targeting. The other
prerequisites and criteria that are conditional to the effectiveness of this strategy were also fulfilled
(see Attachment 5).
o Concrete impacts on business development: uncertainties, as far as ROL is concerned, as well as
future value of the invested capital.
o Given the ongoing disinflation process in the domestic economy - a sustainable inflation rate over
the medium term in line with the quantitative definition of price stability has yet to be attained -
inflation targets are formulated on an annual basis (December/December) and are set over a twoyear
horizon.
For a more detailed analysis of the inflation impact on the national economy see the Central Bank’s
Inflation Annual Report http://www.bnro.ro/PublicationDocuments.aspx?icid=6876
Inflation – see
o http://www.bnro.ro/Direct-Inflation-Targeting-3646.aspx
o http://www.bnro.ro/Characteristics-3653.aspx
o http://www.bnro.ro/Inflation-Targets-3241.aspx
o http://www.bnro.ro/NBR-Projections-4353.aspx
o http://www.bnro.ro/page.aspx?prid=3493
o http://www.bnro.ro/Inflation-Reports-3343.aspx
o http://epp.eurostat.ec.europa.eu/tgm/web/_download/Eurostat_Table_tsieb060HTMLDesc.htm
� Shift to the Euro
o Adoption of the euro foreseen earliest for the 01.01.2015;
o General conditions to enter the eurozone – the five convergence criteria
Figure 1. The convergence criteria for joining the Euro zone
What is
measured:
How it is
measured:
Convergence
criteria:
Price stability
Consumer
price inflation
rate
Not more than
1.5 percentage
points above
the rate of the
three best
performing
Member States
Sound public
finances
Government
deficit as %
of GDP
Reference
value: not
more than
3%
25
Sustainable
public
finances
Government
debt as % of
GDP
Reference
value: not
more than
60%
Durability of
convergence
Long-term interest
rate
Not more than 2
percentage points
above the rate of
the three best
performing
Member States in
terms of price
stability
Source: http://ec.europa.eu/economy_finance/euro/adoption/who_can_join/index_en.htm
Exchange rate
stability
Deviation from
a central rate
Participation in
ERM II for at
least 2 years
without severe
tensions
Comments – Romania is still far from fulfilling these conditions and the recent financial problems made
this objective less important for the moment. It is said that the fast recovery from the crisis will increase
chances to entry to the eurozone. The euro will be an objective for BNR but it is important not to obstruct
the country’s development which sometimes requires inflation and governmental debt.